Trading Up: Why Consumers Want New Luxury Goods--and How Companies Create Them

Overview

Trading up isn't just for the wealthy anymore. These days no one is shocked when an administrative assistant buys silk pajamas at Victoria's Secret. Or a young professional buys only Kendall-Jackson premium wines. Or a construction worker splurges on a $3,000 set of Callaway golf clubs.

In dozens of categories, these 'new luxury' brands now sell at huge premiums over conventional goods, and in much larger volumes than traditional 'old luxury' goods. Trading Up has become the ...

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Trading Up: Why Consumers Want New Luxury Goods--and How Companies Create Them

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Overview

Trading up isn't just for the wealthy anymore. These days no one is shocked when an administrative assistant buys silk pajamas at Victoria's Secret. Or a young professional buys only Kendall-Jackson premium wines. Or a construction worker splurges on a $3,000 set of Callaway golf clubs.

In dozens of categories, these 'new luxury' brands now sell at huge premiums over conventional goods, and in much larger volumes than traditional 'old luxury' goods. Trading Up has become the definitive book about this growing trend.

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Editorial Reviews

David Brooks
Incredibly smart and illuminating.... packed with insights on how shoppers think and behave.
Rebecca Mead
An upbeat survey of a range of consumer brands—Whirlpool, Belvedere, Williams-Sonoma—which, the authors argue, are successful because they appeal not just to the material needs of consumers but to their emotional desires.
The New Yorker
Harvey Schachter
Trading Up helps to explain an important trend and is interesting reading as a sociological study as well as business strategy.
The Globe and Mail
Robert Weisman
Anyone who has passed a Dunkin' Donuts to duck into a Starbucks recognizes the phenomenon. For brands that have smartly positioned themselves, from Victoria's Secret to Williams-Sonoma, trading up is paying off.
The Boston Globe
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Product Details

  • ISBN-13: 9781591840701
  • Publisher: Penguin Group (USA) Incorporated
  • Publication date: 4/29/2008
  • Edition description: Reprint
  • Pages: 320
  • Sales rank: 676,521
  • Product dimensions: 5.52 (w) x 8.52 (h) x 0.83 (d)

Meet the Author

Michael J. Silverstein is a senior vice president of The Boston Consulting Group and the coauthor of the business bestseller Trading Up. He works with leading companies around the world.

 

 

Neil Fiske is the former head of the Chicago office of The Boston Consulting Group and is now the CEO of Bath & Body Works.

John Butman is an established business author and journalist.

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Sort by: Showing all of 3 Customer Reviews
  • Anonymous

    Posted August 29, 2005

    Highly Recommended!

    Authors Michael J. Silverstein and Neil Fiske offer a fascinating look at the upscaling of the American consumer. American buyers were once considered relatively unsophisticated, unable to distinguish foie gras from liver paté. Several factors changed that: globalization, greater net worth due to rising home values, increased travel abroad and the growing influence of the independent female wage earner. Backed by a massive consumer survey, the authors detail these trends to explain consumers¿ motivations for buying everything from $300,000 automobiles to $5 cups of designer coffee. They find that consumers will cut their budgets in some areas so they can 'rocket' up their purchases of luxury brands in other areas. Perhaps most importantly, they explain why your company must avoid getting trapped between the 'New Luxury' providers and the bargain-basement wholesalers. We strongly recommend this book to sales strategists, marketers, product developers and executives seeking to trade up to a more profitable position in the marketplace.

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  • Anonymous

    Posted August 8, 2005

    The Rise of the Super Smart Consumer

    Michael Silverstein has written a built-to-last business book about a global phenomenon that is not going away unlike so many other business fads. Trading Up and trading down has a transformational effect on more and more categories, retailing and markets. Silverstein clearly explains that the increasingly sophisticated consumers of the critical ¿middle market¿ have been key to drive a polarization of the product and service offering to the high and low ends of the price spectrum. Woe be to the businesses which continue to offer conventional goods and services getting ¿stuck in the middle.¿ Think for instance about the Big Three of Detroit, traditional airline companies, and some chains of department stores. Although Silverstein focuses on trading up in this book, he mentions elsewhere that in 2004 in the U.S. alone, trading down was at $1 trillion almost twice as big as trading up. The ¿savings¿ that consumers get from an increasingly efficient economy can be re-injected in even more consumption. This consumption frenzy has resulted in abysmal saving rates that will haunt the U.S. when ongoing demographic changes will start to undermine the financial stability of complementary sources of income as Peter Peterson correctly points out in ¿Running on Empty.¿ In the meantime, smart entrepreneurs and companies have reinvented their marketplace by making ¿massstige¿ or mass prestige products available to an ever-growing proportion of the critical middle market. These products command a price premium over conventional offerings, but are priced well below super-premium or old luxury products. Furthermore, these mass prestige products are pretty resilient in a downturn economy. Trading up is driven by changes to both demand and supply. On the demand side, changes to the role of women as economic agent, the decline of the traditional family, a modified perception of consumption, higher home ownership, more discretionary wealth, and the ¿savings¿ passed on to American households by large discount retailers have fuelled the stratospheric rise of the New Luxury market. On the supply side, Silverstein clearly shows in one product category after the other that the New Luxury trend-setters have been keen to meet that demand. These leaders have made their creed to observe the following eight best practices: 1. New Luxury trend-setters assume that their target customers are very smart. Under no circumstances should these customers be underestimated. 2. New Luxury trend-setters disprove the traditional economic truth that when price goes up, volume necessarily goes down. New luxury products often embody the 20/40/60 rule. These products regularly account for up to 20% of the category¿s volume, 40% of its revenues and 60% of its profits. 3. New Luxury trend-setters create a ladder of real benefits. They not only offer a product with a superior technology and/or design that result in a superior functionally, but also, and more importantly, engage their customers emotionally in an uncertain and fast-paced world. Silverstein has identified four powerful emotional drivers, i.e., taking care of me, connecting, questing and individual style. 4. New Luxury trend-setters do not rest on their laurels in terms of innovation, quality and a flawless experience. The ever-faster cascading effect of innovation, quality and flawless experience from top to bottom in more and more categories obliges New Luxury makers to be restless and paranoid in these areas. 5. New Luxury trend-setters reinvent the price range and positioning of their brand by building an aspiration escalator that leads the consumer from the low-end to the high-end with a clear mix of features and benefits at each step. 6. New Luxury trend-setters customize their value chains to deliver what they promise to their target customer segments. Control of the value chain is considered more important to New Luxury trend-setters than its ownership. L

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  • Anonymous

    Posted October 10, 2009

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